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Why Is Healthcare’s Biggest Problem Tsunamis and Speedos?

One of the strange things about tsunamis is that the most damage is always the result of the second wave, a wave that catches survivors of the first wave by surprise.

If I was a healthcare executive I would have spotters positioned along the beaches looking for wave number two. Instead, many appear to be taking on Mad Magazine’s Alfred E. Neuman’s “What—Me Worry?” attitude.

And here’s why. Ask to see a copy of your health system’s strategic plan. That may be naiveté on my part, but let us pretend that such a document exists. In it you should find a section about where the industry is headed, how that effects your organization, and what your organization is going to do to either take advantage of it or to defend itself from it. I’ll give you a few moments to read those sections…

You couldn’t find that part of the plan, could you? If you went back five years you wouldn’t have any more luck finding that same information in your systems 2010 strategic plan. Your 2010 strategic plan should have mentioned something about possible threats to your business, possible threats about continuing to remain relevant. And included in the discussion about threats should have been a discussion about consumerism—healthcare’s four-letter word.

I challenge you to name a single, provider-driven, impactful innovation to the business of healthcare in the last fifty years. An innovation created by providers to improve their business model. Can anyone recall leaving a strategy meeting and thinking, “Wow, that should shake things up.”

Large retailers held those meetings five years ago, and they came out of their meetings with a plan to bring three things to healthcare; disruption, efficiency, and cost management. Those companies include Wal-Mart, CVS, Whole Foods and Target. And how have providers reacted? They have not.

Now for the bad news. Those same organizations have held more meetings, and what is about to hit the streets is wave two of the tsunami. And that wave will deliver even greater disruption, more efficiency, and even better cost management.

I don’t know the figures for the number of patients seen by CVS, but I am willing to bet that their growth rate and acquisition of new patients is worthy of envy. And since more people are not getting ill, those patients must be coming from somewhere. Retailers are gaining share in a market of excess capacity. The Minute Clinic model has demonstrated that consumers are brand-agnostic purchase unless patients are seeking specialized care.

Is there a better brand name on the planet? Minute Clinic—service in a minute. And they compete for patients against organizations that have Eight-Week Clinics—service when we have an opening.

CVS did not have to build a single new facility to take millions patients from providers and PCPs; they simply reallocated floor space. Heck, they hardly even advertise, and millions of people gladly drive one or two miles for on-demand healthcare.

So, if I am an executive at CVS or Walgreens, what is the next great question they should be asking themselves? I think it is this—“How can we deliver more care to more people without requiring people to come to our stores?” That is wave number two.

The other issue overlooked by provider executives is that 75% of people are very loyal to their retailers. Their loyalty to organizations from which they purchase their medications is even higher because their healthcare insurance is tied to a specific drug retailer.

Consider this for a moment. People think of Uber as a taxi service. Uber’s valuation exceeds $40 billion dollars. And guess what? Uber, the taxi service, does not own a single car. That same taxi service does not employ a single driver. It does not care whether gas prices go up or down because it does not pay for a single gallon of gas. It simply puts drivers and passengers together and lets them sort out the market.

Hotels.com does not own a single hotel. OpenTable does not own a single restaurant. What those organizations own are ideas, ideas that put buyers and sellers together easily and in real time.

And while firms like CVS are disrupting the traditional way of purchasing healthcare, health system executives still think of the term customer as another one of those four-letter words. Note to health system executives: do not concern yourselves with how many letters are in the word, concern yourselves with how to embrace the word.

Every health system that added valet parking did so for one reason—to attract and retain patients. Upgrading your cafeteria and adding a valet service are not examples of innovating your business model.

Beefing up your marketing department will not enable your health system to compete against the second wave. Most health systems cannot even tell you whether marketing’s efforts added a single patient to their system last year.

The time to innovate was last year, and the year before, and so on. My immediate advice to provider executives would be to do one of two things; hold an innovation retreat and do not let anyone leave until everyone in the room thinks Wow, that should shake things up. Or, grab your Speedo and some suntan lotion, and wait for the second wave.

Excellent piece… I am a provider but left practice to work on the First Wave, the Virtual Health Assistant, aka, Avatar for health care. The health care system that you describe, in an all inclusive manner, failed to stop or even slow down the now upcoming tsunami of diabetes. Despite dozens of new drugs and other technologies, it keeps climbing… why… It’s Behavior Stupid!

We know how to change it (over 80 theories and models exist along with tens of thousands of examples and studies). But we failed. We need personal coaches, but there are not enough people in the US to fill this role, hence the VHA.http://www.ajmc.com/contributor/thomas-morrow-md

I am not grabbing my speedo (too old for that!) I’m building the Ark, aka VHA.